By Omar Sattar for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

For the first time since 2005, Kirkuk governorate in Iraq will hold elections Dec. 22 to select its local governing council. Parliament included the multiethnic province of the Kurds, Arabs and Turkmens in the provincial election law approved March 3.

The decision follows an agreement among the three groups’ representatives in parliament and was greatly welcomed by all segments, especially the Kurds, who for years have demanded that elections be held in Kirkuk. Khalid al-Mafraji, an Arab parliament member from Kirkuk, told Al-Monitor that negotiations took more than a year.

The agreement binds the Independent High Electoral Commission to review voters’ records in coordination with the ministries of Interior, Commerce, Planning and Health. If they aren’t able to review the records before the elections, the commission will be obliged to undertake an audit within six months after the elected council begins its work.

“The most important articles of the agreement relate to sharing power,” Mafraji said. The largest bloc in the election will appoint the governor, and the two deputy positions will go to the other two groups. Moreover, federal positions will be determined by the governorate’s residents, according to party size. The agreement also states that the constitution and the law take precedence over the governorate’s council, parliament and the federal government.

The electoral law will remain in effect for four years. Shakhawan Abdullah, who represents Kirkuk in the Kurdistan Democratic Party in parliament, told Al-Monitor, “The agreement between the three components of Kirkuk’s governorate will be effective for only one electoral round, and the elections will not be held in the same way in four years’ time.”

Abdullah believes the provincial election law presents a good opportunity to resolve conflicts in the governorate and give it more administrative powers, like other governorates. The governorate has gone without elections all these years for various reasons. Oil-rich Kirkuk is a disputed area claimed by both the central government in Baghdad and the Kurdish Regional Government (KRG) in Erbil. Its situation is also unique because of its ethnic diversity and disagreements among them.

The constitution stipulates the conflicts in the governorate must be normalized in three stages. The first stage is to allow the return of displaced Kurds and Arabs who emigrated during the regime of deposed Iraqi President Saddam Hussein.

The second stage is to carry out a population census, and the last stage is to hold a general referendum on whether Kirkuk should become a new region, like the autonomous Kurdistan Region, or be annexed to the Kurdistan Region.

All of those procedures were to be carried out before 2007, which wasn’t done. This caused political conflict, partly because of the disagreement between Baghdad and the KRG over having elected authorities with the right to control the governorate’s future.

The Kurdistan independence referendum in September, which included Kirkuk, ended in crisis, and the central government subsequently took over the governorate and cut the Kurds’ authority. The coming elections will give Baghdad and the KRG a chance to solve the current dispute over Kirkuk’s administration.

However, the most important problem that may affect holding elections in Kirkuk is the agreement on a unified record of voters, which may raise doubts about the election results. Iraq hasn’t conducted a census in decades. Ali Khalil, the Arab bloc member of the governorate council, told Al-Monitor that Arabs weren’t in favor of the agreement’s clause that allows an audit to be delayed until after the elections if records can’t be reviewed before then.

“How would we elect a new governorate council while doubting voters’ records at the same time?” Khalil asked.

The Kirkuk local elections will provide a chance to reduce tension in the governorate, a good way to determine the real size of each of the three ethnic groups and a way to form a more legitimate administration — but it could lead to negative results. If one segment is counted and found to have significantly fewer representatives than before, that segment might refuse to accept the election results.

By John Lee.

The Iraqi government has freportedly revoked a contract with a Kurdish-owned garbage removal firm in Kirkuk, resulting in a garbage crisis in the oil-rich province.

The owner of the business, Khalid Shinke, told Kurdistan 24 that the Iraqi government canceled the contract with his company on 28th February, leading to the suspension of garbage collection across Kirkuk.

He added that the central government in Baghdad still owes his company 12 billion IQD.

(Source: Kurdistan24)

By Adnan Abu Zeed for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

The Islamic State (IS) appears to be staging a comeback in parts of Iraq, which could endanger the country’s oil deal with Iran.

Hamid Hosseini, the Iranian secretary-general of the Iran-Iraq Chamber of Commerce, warned in late February that the countries’ plan can’t be implemented fully because of security concerns. The countries signed a bilateral agreement in July 2017 to install a pipeline to transport Kirkuk’s crude oil to Iran to be refined. In the meantime, the oil is being transported by trucks, which are vulnerable to attacks.

The Kurdish military, or peshmerga forces, took control of Kirkuk in 2014 after Iraqi forces fled as IS swept through the area. But in October, Iraqi forces reclaimed the oil-rich territory from the Kurds.

IS has been blamed for numerous recent attacks in the area. On Feb. 19, IS fighters ambushed a convoy of the Baghdad government’s Shiite Popular Mobilization Units (PMU) in the Hawija district, southwest of Kirkuk, killing 27. On Feb. 27, gunmen had targeted the Turkmen Front with a rocket shell. Since Hosseini’s warning, security has deteriorated both in Kirkuk and Hawija. Local authorities have called for military enforcement.

Masrour Barzani, the head of Kurdistan security, stressed that the “IS offensive in Kirkuk province is not coming to an end anytime soon.”

These developments cast clouds of uncertainty over any investment attempts in Kirkuk city, particularly in the oil sector. Yet Rakan al Jibouri, Kirkuk’s Baghdad-appointed interim governor, doesn’t agree, though he acknowledges “there are unsecured areas.”

“This won’t obstruct the development of oil facilities and exportation projects, as the agreement signed by the [Iraqi] Ministry of Oil on Feb. 8 to construct a new refinery clearly demonstrates otherwise,” Jibouri told Al-Monitor.

Ministry spokesman Asim Jihad also told Al-Monitor the present security situation won’t affect Kirkuk oil investments. “The Iranian official’s [Hosseini’s] statement reflects his state’s point of view. The Iraqi side is committed to upholding the agreement as long as Iran is not backing down.”

Jihad said the contract provides for exporting 30,000-60,000 barrels of oil a day via trucks from Kirkuk fields to the border zone near Kermanshah, Iran.

“Work is still underway to install an oil pipeline to Iran with a capacity of over 250,000 barrels [per day],” Jihad added. “Moving forward, we are going to stop using trucks, which are more exposed, require more security measures and cost more.”

Moreover, one of the reasons behind the agreement was “Iran’s need of large amounts of Iraqi oil for refinement purposes, as well as for complementary industries in Iranian areas across [the border].” Jihad said Iraq will also benefit because it will be able to export oil abroad at lower costs.

All that said, however, Jihad noted the Oil Ministry has no authority to assess the security situation: “The ministry is only concerned with the technical end of things.”

Iskander Witwit, a member of the Iraqi parliament’s Security and Defense Committee, contradicted Hosseini’s evaluation. “We haven’t recorded any indications of oil investments in Kirkuk being too risky,” Witwit told Al-Monitor.

He said the Kurdish peshmerga wants “security anarchy so that the oil trade project between Iraq and Iran fails, because the [Kurdistan Regional Government (KRG)] wants oil to be transported through its soil.” The KRG, he said, “seeks to stop all oil and economic projects as long as Kirkuk is not under its control.”

Witwit also challenged a statement by Hosseini that security is at risk because Iran doesn’t have X-ray machines to inspect trucks coming from Iraq.

“This is an irrational reason,” Witwit said. “Truck security is both countries’ responsibility, and oil-transporting trucks are registered and take off from secured points to their designated destination. Therefore, they can’t possibly be used for any other purposes, considering the strict security measures in oil zones. Also, army and PMU troops are dispatched throughout the route used by the trucks.”

Meanwhile, it appears Iraq is moving ahead to expand its export options. Aziz Abdullah, the head of the Iraqi parliament’s Oil and Energy Committee, told Al-Monitor, “Talks between the [Iraqi] federal government and the [KRG] government on transporting oil via Ceyhan [Turkey] pipe have reached advanced stages.”

Ahmad al Askari, the head of the Energy Committee of the Kirkuk Provincial Council, believes those talks reflect Iraq’s “new direction not to solely rely on one window that could be shut on account of political disagreements.”

Speaking to Al-Monitor, Askari added, “Political and security concerns compelled Iraq to consider more than one means of exporting Kirkuk oil. Iraq started a pipeline to Turkey’s Ceyhan port that doesn’t go through the [Kurdish] region, besides the one that does go through the region. In addition, trucks have been moving to Iran since Iraqi forces took over Kirkuk.”

Houston-based GTC Technology is providing a gasoline production complex project for ABG (Al Barham Group Companies) for the refining and distribution of petroleum products.

The grassroots complex will process 12,000 BPD of straight run naphtha (SRN) and untreated natural gasoline (UNG) blend feed to produce high octane gasoline meeting Euro-V specifications. The plant will be located in the city of Kirkuk, in northern Iraq and is supported by the Iraqi Oil Ministry.

The project consists of three units – a naphtha hydrotreater including a naphtha splitter, a C5/C6 isomerization unit, and a heavy naphtha reforming unit.

The project will be the first to utilize a network of three dividing wall columns (DWCs) in a single gasoline complex. The first application utilizes GT-LPG MAX®, a process developed by GTC using Uniting Wall Column (GT-UWC℠) technology which combines adsorption and distillation in the same column to optimize the overall operation and enhance C3+ recovery. The second application of DWC technology is a three-cut naphtha splitter column capable of producing three high purity fractions. The third application is a super deisohexanizer (Super DIH) combining the conventional depentanizer and deisohexanizer columns.

GT-LPG MAX® will collect and process LPG-rich streams, both vapor and liquid, from different stabilizers within the complex to produce on-spec LPG product at one central location (also within the complex) – thereby, eliminating duplicate equipment across different units. The unit will utilize GTC’s proprietary tower internals for the three DWCs as well as specialty heat transfer equipment to maximize productivity and minimize plot space.

Ilya L. Aranovich (pictured), GTC Licensing Manager, said:

We are pleased to work with ABG to provide our full suite of naphtha processing technology and advanced distillation expertise.

“We are confident that ABG will enjoy the robust, reliable performance of the hydrotreating, isomerization and reforming process designs which are optimized using the latest advanced distillation integrated solutions to maximize the return on investment of the project.

“We are excited to extend our track record of providing leading-edge solutions to improve the economics of naphtha processing facilities in the Middle East and around the world.”

(Source: GTC Technology)

Kirkuk Governorate Council has reportedly filed a complaint at the Iraqi Supreme Court against the federal government for taking unilateral steps on the governorate’s oil.

A press report on February 19 cited three moves that it said Baghdad has taken without consultation with local government: An agreement with British Petroleum (BP) to develop Kirkuk oil fields; efforts to export oil to Iran and Turkey; and exporting oil to Iran via tankers.

Though the report referred to these three steps as “contracts“, only the third relates to an agreement that is already being realised. The other moves remain in the initial stages.  The head of the Kurdish Fraternity List at Kirkuk Governorate Council, Muhammad Kamal, told press:

“In accordance with the federal constitution, in provinces that produce oil, there should be coordination with the local governments and no contracts should be signed without consultation with the local administrations”. 

Head of Kirkuk Governorate Council, Rebwar Talabani, stated that the federal government “does not listen to any articles of the constitution or laws“.  He said the majority at the council were hoping that “our demands take the form of a legal case against the Iraqi government“.

According to the report, the council has filed 13 complaints at the Supreme Court against the Iraqi government concerning “violations” by Iraqi security forces and the government since October.

It added that since the federal takeover, the people of Kirkuk have not benefited from the governorate’s oil wealth, whereas prior to the takeover local government was given 10m dollars per month by the Kurdistan Regional Government for exporting its oil.

(Source: GardaWorld)

By John Lee.

Iraq’s Oil Ministry has announced that it has signed an agreement to build a 70,000-bpd oil refinery near Kirkuk.

The statement said the refinery would be built by “Rania international company“, which Reuters refers to as Ranya International, which it says is based in Iraqi Kurdistan.

The plant will produce high octane gasoline and other petroleum products.

(Source: Ministry of Oil, Reuters)

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has signed on Thursday a memorandum of understanding with BP to rehabilitate the oil fields in Kirkuk governorate.

Michael Townsend, CEO of BP, said that the company is going to prepare the necessary studies to increase production at the Kirkuk oil fields to 750,000 bpd.

The two men inspected the Kirkuk fields on Thursday and ordered a speeding-up of rehabilitation operations.

(Source: Oil Ministry)

By John Lee.

The Iraqi parliament has reportedly banned Erbil-based Kar Group from operating oil fields in Kirkuk.

According to Rudaw, it assigned the state-owned North Oil Company (NOC) to take over oil production in the province and export it through Iraq’s State Oil Marketing Organisation (SOMO).

Reuters reports that Kar Group had been operating some of the Kirkuk oilfields since Kurdish Peshmerga forces took control of the city in 2014, following the retreat of the Iraqi army in the face of so-called Islamic State (IS, ISIS, ISIL, Daesh).

It is said to have failed to reach agreement with Baghdad after Iraqi forces re-took the area.

The Kurdish Regional Government (KRG) claims that the Khurmala field, part of the Kirkuk oilfields, is located inside its boundaries.

(Sources: Rudaw, Reuters)

By Mahmut Bozarslan for Al Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

In the last week of December, an armed group ambushed a convoy on the Kirkuk-Hawija road in Iraq, killing seven people. Iraqi security forces couldn’t track the attackers. The identities of those killed were determined quickly: They were Col. Fazil Sebawi of the Iraqi police, his son and five bodyguards.

Shortly afterward, reports of another attack came from south of Kirkuk. Walid Nuri, the leader of the Jiheshad tribe and commander of Hashd al-Ashayer forces southwest of Kirkuk, his wife and son were killed.

Nobody could explain the attacks. After ousting Kurdish forces from Kirkuk, the Iraqi army and Popular Mobilization Units (PMU) had imposed total control over the area and ensured its security. However, the Islamic State (IS) soon claimed responsibility for both attacks.

After seizing Mosul in 2014, IS had turned toward Kirkuk but was repelled by Kurdish forces controlling the town. Yet, possibly because of the region’s oil wealth, IS never gave up on Kirkuk. Although the extremist group couldn’t control the city center, its influence over the province’s southern regions never waned.

Although IS was not active after it left Kirkuk, it resurfaced after the Iraqi army took control of the region. Iraqi forces went after the IS militants, killing 10 of them in two attacks. Six militants were killed, three in Sadiye and three in Beshir villages. Military commander of Kirkuk army operations announced the six killed were the attackers who had staged the two attacks.

But how did IS resurface even after the region came under the total control of the Iraqi army and the PMU? Security sources in the region, who asked not to be identified, said IS has resumed operations south of Kirkuk. They said sleeper cells of the group have been reactivated and are preparing for new operations.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] said on Sunday that a deal signed with Tehran to swap up to 60,000 barrels per day of crude produced from the northern Iraqi Kirkuk oilfield for Iranian oil is for one year.

This is an agreement for one year and then we will see after that whether to renew it,” Luaibi told reporters in Kuwait City on the sidelines of an Arab oil ministerial meeting, Reuters reported.

The agreement signed on Friday by the two OPEC countries provides for Iran to deliver to Iraq’s southern ports “oil of the same characteristics and in the same quantities” as those it would receive from Kirkuk.

The deal in effect allows Iraq to resume sales of Kirkuk crude, which have been halted since Iraqi forces took back control of the fields from the Kurds in October.

Between 30,000 and 60,000 bpd of Kirkuk crude will be delivered by tanker trucks to the border area of Kermanshah, where Iran has a refinery.

The two countries are planning to build a pipeline to carry the oil from Kirkuk, so as to avoid trucking the crude.

The pipeline could replace the existing export route from Kirkuk via Turkey and the Mediterranean by pipeline.

(Sources: Tasnim, under Creative Commons licence; Iraqi Ministry of Oil)